7th Pay Commission: Will government employees get maximum monthly HRA hike of Rs 48,000 from next month?

New Delhi: The central government employees are likely to get maximum monthly hike in house rent allowance (HRA) by up to Rs 48,000 from June.

As per sources, the Empowered Committee of Secretaries (E-CoS) set up to screen the 7th Central Pay Commission (CPC) recommendations on allowances is expected to firm up the proposal in next 10-15 days for approval of the Cabinet.

A high-level committee headed by the Finance Secretary, Ashok Lavasa had on April 27 submitted its report to Finance Minister Arun Jaitley.

The report is being currently examined by the Department of Expenditure. It will be placed before the Empowered Committee of Secretaries (E-CoS) set up to screen the 7th CPC recommendations and to firm up the proposal for approval of the Cabinet.

"After consideration by the E-CoS, the proposal for implementation of 7th CPC recommendations on allowances after incorporating the modifications suggested by the committee on allowances in its report shall be placed before the Cabinet for approval," the finance ministry has said.

The Lavasa Committee has suggested modifications in some allowances applicable universally to all employees and also for those in specific categories, including railways and defence, after examining the 7th Pay Commission recommendations.

"Modifications have been suggested in some allowances which are applicable universally to all employees as well as certain other allowances which apply to specific employee categories such as railwaymen, postal employees, scientists, defence forces personnel, doctors, nurses etc," the finance ministry has added.

The committee on allowances has reportedly given its view in favour of AK Mathur-led 7th Pay Commission recommendation, regarding decrease in house rent allowance (HRA) by 2-6 percent depending on type of cities.

The 7th Pay Commission headed by AK Mathur had earlier proposed the rate of House Rent Allowance (HRA) at 24 percent, 16 percent and 8 percent of the Basic Pay for Class X, Y and Z cities respectively.
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The Commission had also recommended that the rate of HRA will be revised to 27 percent, 18 percent and 9 percent when DA crosses 50 percent, and further revised to 30 percent, 20 percent and 10 percent when DA crosses 100 percent.

The existing rates of HRA for Class X, Y and Z cities and towns are 30 percent, 20 percent and 10 percent of Basic pay (pay in the pay band plus grade pay)
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Option 1

If the government accepts the bare recommendations of A K Mathur-led 7th Pay Commission then the HRA component of central government employees will increase ranging between 106 percent and 122 percent.

Take, for instance, a central government employee at the very bottom of the pay scale under 6th Pay Commission was till now entitled to an HRA of Rs 2,100 on basic pay of Rs 7,000 (basic pay that includes pay of pay band + grade pay) in a Class X city. It is to be noted that government, while implementing the 7th Pay Commission in June last year had made it clear that till the final outcome of allowances committee is being placed, the employees would be getting the allowances as per 6th Pay Commission.

Now, as per 7th Pay Commission, the new entry level pay at this level is Rs 18,000 per month against which the new HRA for a Class X city would be Rs 4,320 per month, that is 106 percent more than the existing level.

Similarly, at the highest level of the pay scale, the Cabinet Secretary and officers of the same rank have a basic pay of Rs 90,000, which means they are entitled to current HRA of Rs 27,000 in Class X towns. After the revised pay scale, the new basic pay is Rs 2.5 lakh, for which the HRA would be Rs 60,000, meaning a hike of 122 percent.

Option 2

If the government retains the exiting HRA rates (as per 6th Pay Commission) then the HRA component of central government employees will increase ranging between 157 percent and 178 percent.

Take, for instance, a central government employee at the very bottom of the pay scale under 6th Pay Commission was till now entitled to an HRA of Rs 2,100 on basic pay of Rs 7,000 (basic pay that includes pay of pay band + grade pay) in a Class X city. It is to be noted that government, while implementing the 7th Pay Commission in June last year had made it clear that till the final outcome of allowances committee is being placed, the employees would be getting the allowances as per 6th Pay Commission.

Now, as per 7th Pay Commission, the new entry level pay at this level is Rs 18,000 per month against which the new HRA for a Class X city would be Rs 5,400 per month, that is around 157 percent more than the existing level.

Similarly, at the highest level of the pay scale, the Cabinet Secretary and officers of the same rank have a basic pay of Rs 90,000, which means they are entitled to current HRA of Rs 27,000 in Class X towns. After the revised pay scale, the new basic pay is Rs 2.5 lakh, for which the HRA would be Rs 75,000, meaning a hike of around 178 percent.